Business Models/ Office Management/ System-Based Practice

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Business Models/ Office Management/ System-Based Practice

Business of Medicine
Author Credentials 

Lawrence M. Simon, MD
Assistant Clinical Professor
Otolaryngology-Head & Neck Surgery
LSU Health Sciences Center 
New Orleans, LA

Module Summary

A business model represents or describes how a business might function.  Business models for the practice of medicine continue to evolve, as physicians must constantly negotiate the concerns of obtaining new patients (customer acquisition); patient satisfaction (customer retention); various practice/revenue models (solo, group, employed, various partnerships, ancillary services, joint ventures); and ensure that revenue is sufficient to cover expenses and ensure continued practice growth. 

The target audience for this module will be physicians who have an ownership stake in a practice or other joint venture and residents who are considering this as their practice model.

Module Learning Objectives 
  1. Define a business model.
  2. Explain the various business models pertinent to the practice of medicine.
  3. Describe the fundamentals of office management.
  4. Recognize how systems-based practice relates to the practice of medicine.
  5. Cite the processes involved in a patient office visit.
     
Objective 1: Define how business models apply to the practice of medicine.
  1. Define a business model
  2. Describe the business processes that must occur from the time a patient calls for an appointment through final payment.
    1. Review the basic components of a medical practice
    2. Describe the various ways in which you will collect revenue
    3. Review the considerations involved in practice growth, development, and marketing
  3. Recognize the various ways that revenue arrangements can be structured and the benefits and liabilities and of each 
    1. Ownership of a private practice
      1. Solo
      2. Group
        • Know what an Independent Practice Association is
        • Myriad of group arrangements
    2. Real estate/office space: own vs rent
      1. Hospital partnership
    3. Partnerships (i.e. imaging centers, surgery centers, etc.)
      1. 100% physician owned
      2. Joint venture with hospital
        • Know what a Physician Hospital Organization is
      3. Review Federal Stark law regulations
      4. review local/state law regulations
  4. If considering employment, understand the implications and know how to properly value your practice and negotiate sale to the hospital
  5. Know the difference between a business model and a financial model
    1. Describe how to calculate your expenses and predict your revenue

References:

  1. AAO-HNSF; Malekzadeh, Sonya, ed. Otolaryngology Lifelong Learning Manual, 3rd Edition. New York: Thieme Medical Publishers. 2015.
  2. American College of Surgeons: Practice Management 
  3. American Medical Association:
  4. Starr, Paul. The Social Transformation of American Medicine. New York: Basic Books. 2017.
Objective 2: Describe the core concepts of good office management
  1. Describe the key functions of office management.
    1. List the three components of the business triangle
  2. List the fundamentals of good office management.
  3. List the basic processes involved in:
    1. Acquiring a patient
    2. Scheduling a patient 
    3. Seeing a patient (including check-in, rooming, and check-out)
    4. Being paid for services rendered
  4. Recognize the various facets in which Information Technology must be considered, including the expense


References: 

  1. Bliss JA, Caputy GG. The business acumen of Canadian plastic surgeons. Plast Reconstr Surg. 1995 Aug;96(2):469-78. 
  2. Parekh SG, Singh B. An MBA: the utility and effect on physicians' careers. J Bone Joint Surg Am. 2007 Feb;89(2):442-7.
  3. Satiani B. Business knowledge in Surgeons. Am J Surg. 2004 Jul;188(1):13-6.
  4. Wilkins HJ, Pierotti RJ, Motley RJ, Cohan HD, Conrad JL, Derstine RL, Mertzanis P, Bender AD. Physician-owned groups: the best strategy for success. Fam Pract Manag. 1999 May;6(5):38-41.
  5. Young MA, Hough DE, Peskin MR. Outcomes of a program in business education for physicians and other health care professionals. South Med J. 2003 Oct;96(10):1000-6.
Objective 3: Define systems-based practice and relate it to the private practice of medicine
  1. Define “systems-based practice.”
  2. Describe how the Health Insurance Portability and Accountability Act (HIPAA) law may affect systems-based practice.
    1. To be successfully accomplished, Systems-based practice relies on interoperability of record systems and the ability to share information across multiple platforms
    2. Federal privacy regulations must be considered when attempting to work across system platforms
  3. Review how systems based practice relates to quality improvement

References:

  1. American Medical Association: Health systems science peer reviewed articles

 

 

Review Questions
  1. What is a business model?
  2. How does a business model differ from a financial model?
  3. What are Independent Practice Associations and Physician Hospital Organizations?
  4. List all steps involved in a patient visit, from acquisition to payment, and note the relative cost of each

 

Resources 

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  1. Annual Meeting Webcast (AMW):